Freels

Freels

“Cash is king” the cliché says but what do you need to know about storing currency at home and the associated risks?  What I mean here is keeping physical currency on hand in a Mason jar, mattress or home safe.  Over the course of modern history, certain events have led people to believe they need to get their cash out of the bank and keep it “safe” at home.  However, home is the least safe place.  Let’s discuss why.

First, when your funds are held in an institution insured by the FDIC, your money is guaranteed to be available to you by the federal government up to $250,000.  Plus, you can legally and ethically open various deposit accounts at one bank and gain much more than $250,000 in insurance from the FDIC.  Your banker can help you with that.  So even if a bank ultimately fails, your funds are guaranteed up to that amount. 

Second, there is no risk of theft, fire or other destruction in the bank. These days, banks don’t hold a lot of currency in the vault. Most people don’t use that much cash so there is no need for a bank to keep that much in inventory. But what currency is there is protected by fire-resistant, high security vaults and security systems, it is under dual control and it is highly monitored.  Even if somehow, it is stolen or destroyed, banks carry specific insurance for its replacement.

In your home, currency can be stolen, burned, misplaced or lost in a weather event.  Many think that will never happen but it does and, when it does, it is entirely likely your homeowner’s insurance will not cover the amount of cash you say you had in the house.  It will be lost and cannot be replaced.  So, all that hard-earned savings that took you years to build that you’re hiding in a brown paper sack in the back of your closet will be gone in an instant. 

Also, if you think that you’re the only person who knows the cash is there, you’re mistaken.  Think of all the people that are in your home such as vendors, family and friends.  They’re trustworthy but you casually mention the cash or they happen to find it.  You don’t worry about them stealing it but who will they accidentally tell?  Who will overhear them telling it?  That person will have no issue with breaking into your home and stealing your cash and will have no concern about harming you or your family to get to it.  It happens quite often.

Are there legitimate reasons to keep an amount of cash in your home?  I can’t answer that for you.  It’s your personal preference.  But, there are numerous banks and ATM’s within minutes of your home that will give you ready access to sizable amounts of cash 24 hours a day should you need it in the moment.  You should have checks and a debit card to make purchases at most merchants. 

You may have a credit card with a sizable limit that will allow you to conduct a transaction in an emergency.  Also, your bank will issue a cashier’s check, send money by wire transfer or send funds via the Automated Clearing House (ACH).  What reasons do you have to keep that much cash in the house?  There are really none that outweigh the risk.

There is real risk in keeping that much cash in your home.  When you do so, you put your money at risk and maybe your life in peril.  Please consider other options that promote personal safety and financial security like keeping it in the bank.  By doing so, you will protect yourself, your family and your money.  Stay financially safe.

Frank Freels, Jr. is the senior vice president, security officer of Volunteer State Bank.

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